I have a friend who is probably in her mid 50's. Her first husband was a custom home builder and she worked for him on that. They had plenty of money and nice things. It turned out though, that he was a crook. He got arrested and she got a divorce.

Following that, she re-trained and became a kindergarten school teacher and has done that since. But while schools are experiencing tough times all over, the school she works for has a considerable amount of poverty and non-English speaking students in its mix. Pay is low and the administration makes life difficult. There is considerable debate in the legislature currently on whether to approve spending for books and a $1500 pay raise for teaches. It takes a huge toll on her, but she wants to stick it out until retirement so she can get her pension.

She has approx 8 years left, and apparently the school offered her the chance to "buy" some service years, which apparently lets you pay for your final years and get early retirement. The years were $8,000 each so she bought 3. This means she still has another 5 years to work there. If she does leave or get fired before then, she gets all the money back.

There is a lot of home building going on in the area, and I keep suggesting she go apply to work sales there. The saleman I used for my house said in his job it's "hard not to make $300,000/year." Since she has experience with custom homes, she should be in a good position to return to it, and even if she was only an assistant she could make much better money with many fewer problems.

Financially, she has her house in a fairly rich city and though it is smallish, it is entirely paid off as of a few months ago. Her son is in college currently. Other than that, she doesn't have a lot of extra money.

The key thing is she has nothing saved for retirement. There are options, such as selling her house and moving to something smaller as it's mostly just her that lives there. But for personal reasons that may be difficult for her. I know there is a thing called a reverse mortgage where you basically cash out from your house and start the mortgage over. I would think the house has appreciated in value a lot, but she isn't so sure.

The question I posed to her, was whether her pension would pay her enough to justify staying in the teaching job for 5 more years, or if she could get out now, find a new higher paying job, and put money away from that at a better rate than her pension will ultimately pay her. Basically there is no way to know without running the numbers. Is there any calculator you know of that I can use for this? Or what sort of formula it would require to determine how much she would need to make in a new job vs what her pension would pay, etc. Also, what are her best options for retirement savings? Or is there some calculator to compare the options there too?

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